And there was a collective gulp heard ’round City Hall.
I wouldn’t be surprised to find some of London Breed’s administrators forced into a life of crime to keep the street lights on…just kidding, just kidding. But “I don’t think we’ve reached the bottom yet” is all that encouraging, no?
Real estate transfer taxes have fallen off a cliff as fewer Downtown office buildings change hands. Some are selling at steep discounts. t.co/IHMMWZ4ETq
— The San Francisco Standard (@sfstandard) September 5, 2023
How bad was it? Well, now that they’ve toted everything up for last year, it’s looking grim.
The city’s transfer tax revenue—which is directly tied to the sale of buildings—has fallen off a cliff due to far fewer commercial properties trading hands. Home sales in San Francisco, which provide a smaller portion of transfer tax revenue, have also dropped from their 2021 peak.
In the last fiscal year, San Francisco pulled in $186 million in transfer tax revenue—the lowest number in more than a decade, according to Ted Egan, the city’s chief economist.
The city was already staring down a $720-744M budget shortfall in spending but they hadn’t counted on coming up almost $100M shy of their tax revenue estimate. That’ll put a wrinkle in your drawers.
There’s also another fiscal locomotive coming through the tunnel at them. A couple of weeks ago, I posted about how many building owners were petitioning for reductions in their appraised values, which translates into less taxes.